The Rechargeable Battery Market and Main

Trends 2016 – 2025

Novi, Michigan, USA Mike Sanders September 2017 AVICENNE ENERGY

Presentation Outline • The rechargeable battery market in 2016 • The Li-ion battery value chain Christophe PILLOT • xEV & ESS battery market + 33 1 47 78 46 00 Forecasts & conclusions [email protected] • THE BATTERY MARKET IS REALLY DYNAMIC

Cellular Phones sold per Year (Million) Portable PC sold per Year (Million)

3000 400 Li-ion Li-ion Year year NiMH / 300 195 M / 2000 The Rechargeable Battery Tablets Market and Main Trends 200 Units

2016 – 2026 Units 1000 165 M 100 Portable

Million PCs 0 0

Million 2000 2016 2000 2016 Tons of cathode active materials Li-ion 18650 cell price ($/Wh)

250000 3 Novi, Michigan, USA 211 000 2,6 September 2017 200000 2 150000 Tons 100000 $/Wh 1 50000 7 000 0,15 Christophe PILLOT 0 0 + 33 1 47 78 46 00 2000 2016 2000 2016 [email protected] Source: AVICENNE ENERGY, 2017 2 THE WORLDWIDE BATTERY MARKET 1990-2016 Lithium Ion Battery: Highest growth & major part of industry investments 120 000 The Rechargeable Battery Market and Main Trends CAGR Li-ion 2010-2016: +25% 2016 – 2026 100 000

80 000 Others (Flow battery, NAS, …)

60 000 Li-ion Novi, Michigan, USA MWh NiMH September 2017 40 000 NiCD

20 000

0 Christophe PILLOT 1990 1995 2000 2005 2010 2015 2016 + 33 1 47 78 46 00 Source: AVICENNE ENERGY, 2017 [email protected] 3 THE WORLDWIDE BATTERY MARKET 1990-2016 Lithium Ion Battery: Highest growth & major part of the investments Lead acid batteries: By far the most important market (90% market share) The Rechargeable Battery 400 000 500 000 Market and Main Trends 450 000 2016 – 2026 350 000 400 000 300 000 Others (Flow battery, 350 000 NAS, …) 250 000 Li-ion 300 000

200 000 NiMH 250 000 Novi, Michigan, USA MWh

MWh 200 000 September 2017 150 000 NiCD 150 000 100 000 Lead Acid 100 000 50 000 50 000 0 0

Christophe PILLOT + 33 1 47 78 46 00 1990 1995 2000 2005 2010 2015 2016 [email protected] Source: AVICENNE ENERGY, 2017 4 THE WORLDWIDE BATTERY MARKET 1990-2016 69 BILLION US$ in 2016 – Pack level1 8% AVERAGE GROWTH PER YEAR (2006-2016)

The Rechargeable Battery 80 80 Market and Main Trends Others (Flow 70 70 OTHERS 2016 – 2026 battery, NAS, …) 60 60 AUTOMOTIVE 50 Li-ion 50 INDUSTRIAL 40 40 30 NiMH 30 E-BIKES Billion US US $ Billion US$ Billion 20 20 POWER TOOLS 10 NiCD 10 Novi, Michigan, USA PORTABLE 0 0 September 2017 SLI Lead Acid 1990 2000 2005 2010 2013 2014 2015 2016 1990 2000 2005 2010 2013 2014 2015 2016

SLI: Start light and ignition batteries for cars, truck, moto, boat etc… INDUSTRIAL PORTABLE: concumer electronics (cellular, portable PCs, tablests, • MOTIVE: Forklift (95%), others Camera, …), data collection & handy terminals, • STATIONARY: Telecom, UPS, Energy Storage System, Medical, Others (Emergency Lighting, Security, Railroad Signaling,, Diesel Generator POWER Tools: power tools but also gardening tools Starting, Control & Switchgear, AUTOMOTIVE: HEV, P-HEV, EV Christophe PILLOT 1- Pack: cell, cell assembly, BMS, connectors – Power electronics (DC OTHERS: Medical: wheelchairs, medical carts, medical devices (surgical power tools, mobile instrumentation (x-ray, ultrasound, EKG/ECG, large oxygen + 33 1 47 78 46 00 DC converters, invertors…) not included concentrators [email protected] Source: AVICENNE ENERGY, 2017 5 LI-ION IN 2016 - MAIN APPLICATIONS

90 000 MWh - 23 B$ (1) CAGR 2006/2016 5 675 M small cells +23 % per year in Volume 2000: < 2GWh Li-ion Battery sales, The Rechargeable Battery MWh, Worldwide, 2000-2016 Portable Phones Market and Main Trends 100 000 Electronics 17% 2016 – 2026 90 000 17%

80 000 Others 70 000 Portable PC 60 000 Industrial, 66%

50 000 ESS

M Wh Novi, Michigan, USA 40 000 Auto, E-bus 2016: 90 GWh September 2017 30 000 Auto, E-bus Excl. China 20 000 Auto, e-bus Auto, E-bus 17% China 10 000 Excl. China 33% - Electronic devices

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Electronic Christophe PILLOT devices Industrial, ESS (1) Cell level + 33 1 47 78 46 00 35% Others 5% Others: medical devices, power tools, gardening tools, e-bikes… [email protected] 10% Source: AVICENNE Energy 2017 6 LI-ION BATTERY: MARKET SHARE IN 2016 WORLDWIDE

The worldwide Li-ion battery market The worldwide Li-ion battery market Company market share in 2016 in volume Company market share in 2016 in value(1) The Rechargeable Battery (small cells only) 6,4 B cells Estimated at B$ 31 in 2016 Market and Main Trends 2016 – 2026 Others 3% 9% 8% 24% OTHERS 9% 31%

9% 10% Novi, Michigan, USA 7% Zhuoneng 2% September 2017 5% 5% 8% Optimum 4% 9% 2% BYD 4% 19% A123 CALB 7% 1% 2% AESC Microvast BAK 2% 2% COSLIGHT Others for Small cells: Chinese suppliers like Tenpower, DLG… YUASA First New Christophe PILLOT 1% (1) LIB battery pack market 1% Energy + 33 1 47 78 46 00 3% [email protected] Source: AVICENNE ENERGY Analyses 2017 7 LIB: THE BIGGEST PART OF THE COST IS RAW MATERIALS RAW MATERIALS ACCOUNT FOR 50 TO 70% OF LIB CELLS BUSINESS RAW MATERIAL COST IMPACT DRASTICALY ON THE BATTERY MAKERS PROFIT

The Rechargeable Battery LIB Cost structure for TESLA & 40 Ah EV Average cost structure of Li-ion cell in 2016 Market and Main Trends pouch cell NMC 2016 – 2026 Cell Process 100% Margin Yield, Scraps Warranty 7% 4% 90% Operating profit 3%

80% Proces Yield Overheads

70% 3% Depreciation Sales & Adm 3% 60% Cathode cost Production cost SGA, overhead Novi, Michigan, USA 50% R&D 22% R&D September 2017 40% 6% Anode cost Utility Energy, 6% 30% utilities 20% Labor 4% Electrolyte 6% 10% Material Direct labor 4% 0% Depreciation Separator 7% 14% Other materials Christophe PILLOT 11% + 33 1 47 78 46 00 Note: Average mix of cylindrical, prismatic & laminate cells [email protected] Sources: AVICENNE ENERGY 2017 8 LI-ION VALUE CHAIN – MARKET DEMAND

CATHODE 211 OOO T in 2016 Revenues: 4,75 B$ CELL PACK CAGR 06/16: +14% MANUFACTURERS MANUFACTURERS

ANODE Revenues: Revenues: The Rechargeable Battery 104 000 T 22,5 B$ 31 B$ Market and Main Trends Revenues: 1,16 B$ 2016 – 2026 CAGR 06/16: +13% Gross margin: Gross margin: <10% <10%

ELECTROLYTE

103 000 T

Revenues: 1,4 B$

CAGR 06/16 : 19%

Novi, Michigan, USA September 2017 SEPARATOR 1 500 M m² Revenues: 1,6 B$ CAGR 06/16 : 15%

ANCILLARY

Christophe PILLOT Revenues: 1,5 B$ + 33 1 47 78 46 00 [email protected] Sources: AVICENNE ENERGY 2016 9 2025 LIB FORECASTS FOR PORTABLE ELECTRONIC DEVICES 2000-2025 LIB market, MWh, by 2000-2025 LIB market, M cells, application (3C) by form factor (3C) The Rechargeable Battery 6000 Market and Main Trends CAGR 16-25: + 6% 2016 – 2026 60000 5000 50000 Other Portable

Electronics 4000 40000 Tablets 3000 30000

Novi, Michigan, USA cells/year M Portable PCs

MWh 2000 September 2017 20000 1000 10000 Cellular Phones

0 0 2000 2005 2010 2015 2020 2025

2000 2005 2010 2015 2020 2025 Li-P Li-ion Pr Christophe PILLOT Li-ion Cyl Takeshita - March 2013 (1) + 33 1 47 78 46 00 Source: AVICENNE ENERGY Analyses [email protected] (1) Source: Takeshita, Battery Japan 2013 BJ-3 conference Slide p 4 10 X-EV MARKET CAGR 2016-2025:+ 17% 200 000 185 GWh Why x-EV ? 180 000 Definition & segmentation 160 000 X-EV worldwide in 2016 140 000 E-buses The Rechargeable Battery Market and Main Trends By country buses

2016 – 2026 - 120 000 110 GWh PHEV & EV in By car makers China

100 000 EV By battery chemistry

for Auto & E

X-EV forecasts 80 000 PHEV

MWh Novi, Michigan, USA 60 000 HEV September 2017 AVICENNE ENERGY & other 45 GWh analyst forecasts 40 000 Battery chemistry forecasts 20 000 Battery cost forecasts - Christophe PILLOT X-EV battery forecasts 2016 2020 2025 + 33 1 47 78 46 00 [email protected] 11 Growth 2015-2016: +2% HEV WORLDWIDE IN 2016 From 1,8 M to 1,84 M HEV 1,8 M HEV HEV sold per year, M units, worldwide, Penetration of hybrids in the global sales, 2000 - 2016 2000-2016

2,0 30% JAPON OTHERS The Rechargeable Battery 1,8 20% Market and Main Trends 1,6 2016 – 2026 10% USA 1,4 0% EUROPE 1,2 Penetration of HEV

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1,0 Gazoline price impact on HEV market in

0,8 Novi, Michigan, USA the US

600000 4 September 2017 0,6 3 400000 year

0,4 / Gallon

2 $

0,2 200000 1 0,0

0 0 Gasoline HEV sales per

Christophe PILLOT 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 + 33 1 47 78 46 00 [email protected] Source: TOYOTA, HONDA, , FORD, GM, HYUNDAI, MERCEDES, GM, BMW, VW, PORSCHE… Compilation AVICENNE ENERGY Micro hybrid not included 12 PHEV SOLD WORLDWIDE

World excl. China growth +14% China is leading the P-HEV Chinese Growth + 21% market thanks to high incentives Others US 6% 24% The Rechargeable Battery 300000 OTHERS CHINA Market and Main Trends +16% SAIC CHINA 2016 – 2026 30% 250000 BYD JAPAN OTHERS 2% EUROPE 200000 AUDI

) 38% PORSCHE

units HYUNDAI 120 000 150000 VOLVO Novi, Michigan, USA 100 000 Europe HEV (

P- DAIMLER September 2017 ) 100000 BMW 80 000 China HONDA units 60 000 USA 50000

MITSUBISHI HEV ( 40 000 VW P- 20 000 0 FORD Others TOYOTA Japan Christophe PILLOT - + 33 1 47 78 46 00 2010 2011 2012 2013 2014 2015 2016 GM 2012 2013 2014 2015 2016 [email protected] Source: AVICENNE ENERGY Analysis, 2017 13

EV SOLD WORLDWIDE

World excl. China growth +14% China is leading the EV market Chinese Growth + 68% thanks to high incentives Others US Other China 4% 16% The Rechargeable Battery 600000 GAC Market and Main Trends JAPAN Chana 4% 2016 – 2026 +35% JMC 500000 JAC EUROPE 21% BAIC CHINA 400000 Zhidou 55% Zotye ) Kandi BYD 300 000

units 300000 Others China Novi, Michigan, USA BOLLORE 250 000 September 2017 EV ( PSA Honda 200 000 200000 MITSUBISHI ) DAIMLER

units 150 000 FIAT ( GM 100000 EV Ford 100 000 Europe USA VW 50 000 0 SMART Others BMW Japan Christophe PILLOT Toyota - 2010 2011 2012 2013 2014 2015 2016 Renault 2012 2013 2014 2015 2016 + 33 1 47 78 46 00 NISSAN [email protected] Source: AVICENNE ENERGY Analysis, 2017 14

XEV BUSES MARKET IN CHINA

xEV buses market in China: Rationales 132 000 xEV Buses sold in 2016 The Rechargeable Battery 140000 The Chinese government is working on addressing Market and Main Trends environmental issues. Central and local 2016 – 2026 120000 governments are engaged in subsidy policies to promote EV/PHV/FCV as new energy vehicles. The

100000 amount of subsidy for EV/FCV with low environmental impact is set high. As the subsidy 80000 policy is announced to be carried out until 2020, it is 116000 EV Bus predicted that this market will be on an expansion Novi, Michigan, USA 88000 trend centering on EV. However, due to the 60000 PHEV Bus September 2017 occurrence of the case of receiving subsidies illegally in 2015, the government has begun to 40000 strictly control the production of new energy vehicles after 2016. 20000 24000 16000 Christophe PILLOT 0 + 33 1 47 78 46 00 2012 2013 2014 2015 2016 [email protected] 15 XEV BUSES MARKET IN CHINA xEV buses market in China: 132 000 xEV Buses sold in 2016 112 000 xEV Buses sold in 2015 YUTONG 18% 15% The Rechargeable Battery KINGLONG Market and Main Trends OTHERS 6% 2016 – 2026 33% KINGLONG ZHONGTONG ASIASTAR OTHERS 21% 12% 1% 53% ANKAI BYD 1% 3% DONGFENG FOTON ZHONGTONG 12% 1% 3% ASIASTAR Novi, Michigan, USA GOLDEN GOLDEN BYD 1% ANKAI FOTON September 2017 DRAGON DONGFENG DRAGON 5% 4% 3% 4% 5% 2%

The new energy bus market in China is mainly made up of EV with a large amount of subsidy from the government, and there are many cases where older makers also produce PHV. As a result of the illegal receipt of subsidy occurred in 2015, publication of the company name and administrative guidance (penalty) from the government were carried out. Consequently, several makers including have Christophe PILLOT significantly reduced their market share in 2016, and old makers such as Yutong and Zhong Tong are expanding their + 33 1 47 78 46 00 market shares. [email protected] 16 LITHIUM ION CELL PRODUCTION Korean companies start to move in Malaysia New production capacity in Europe and US

$ 562 M $ 562 M $ 360 M $ 600 M $ 1 700 M (1) 3-5 GWh 3-5 GWh 2-3 GWh 1 GWh 25 GWh Korea – 17% The Rechargeable Battery 2018 2018 2018 2019 2025 SAMSUNG Market and Main Trends $ 5 Bn LG 2016 – 2026 35 GWh SK 2017 EU -<1% Kokam SAFT USA – 2% FIAMM BOLLORE China – 53% LG Japan – 20% Johnson-Controls BYD Panasonic Enersys GP Sony Novi, Michigan, USA SAFT Lishen NEC September 2017 COSLIGHT Maxell ATL PEVE BAK YUASA B&K Wanxiang (A123) Others* – 7% SAMSUNG LG

Source: AVICENNE 2017 Christophe PILLOT + 33 1 47 78 46 00 * OTHERS: Malaysia mostly (1) Government subsidies only [email protected] 17

THE LITHIUM ION BATTERY MARKET 2 FORECASTS 3 major limiters on batteries, for the development of electric vehicle 1- SAFETY IS A SINE-QUA-NON CRITERIA 3- BATTERY COST Average Cell price The Rechargeable Battery Market and Main Trends 500 Margin Warranty 2016 – 2026 400 Overheads Sales & Adm

300 R&D Energy, utilities Direct labor

$ / kWh 200 Depreciation Scraps 100 Others Separator Electrolyte 0 Anode (1) Novi, Michigan, USA 2- TIME TO MARKET 2010 2016 2020 2025 Cathode (1) September 2017 • The research and development in this industry is very long Average Pack price and time consuming. 400 • Time to market to commercialize a new material is long. Pack Cost Remember that the first Li-ion battery was launched by Sony 300 Cell Manufacturing in 1991 with LCO cathode, graphite, LiPF6 electrolyte & Other Materials 200 polyolefin membrane. It was 20 years ago. Separator • LTO was invented by Matsushita in 1993 (22 years ago) 100 Electrolyte

• Lithium iron phosphate was invented in 1995 (20 years ago). $ / kWh Anode Christophe PILLOT • So, it takes between 10 & 20 years to commercialize a new 0 Cell Pack Cell Pack CellPack Cathode + 33 1 47 78 46 00 material in the battery industry. 2016 2020 2025 [email protected] (1) Active material only 18 HEV, P-HEV, EV 2025 FORECASTS

HEV manufactured PHEV manufactured EV manufactured 5 100% 1,2 2,5 70 The Rechargeable Battery 4,5 90% 1,05 Market and Main Trends 2 1 60 2016 – 2026 4 80% 2

50 3,5 70% 0,8 World Excl.

0,8 China

3 60% 1,5 0,65 World Excl. 40 China World Excl. 0,8 1,25 2,5 China 50% 0,6 ion HEV

- Million cars Million cars kWh / EV

Million cars 30 Novi, Michigan, USA 1 0,45 2 3,9 40% % Li September 2017 0,4 0,35 0,5 1,5 3,0 30% 20 1,2 0,45 1 2,1 20% 0,5 0,2 0,3 0,8 10 0,24 0,5 1,1 10% 0,2 China China 0,1 0,18 0,08 0 0,02 0 0 0% 0 2010 2015 2020 2025 Christophe PILLOT 2010 2015 2020 2025 2010 2015 2020 2025 + 33 1 47 78 46 00 HEV: 1kWh battery / car PHEV: 12 kWh battery / car [email protected] 19 TOTAL BATTERY DEMAND 2025 FORECASTS Li-ion for EV, HEV & P-HEV Battery Li-ion for EV, HEV & P-HEV Battery needs (MWh) needs (M$) CAGR 2016-2025: +17% CAGR 2016-2025: +12% The Rechargeable Battery Market and Main Trends 200 000 30000 2016 – 2026 180 000 25000 160 000 140 000 20000 120 000 100 000 15000

Novi, Michigan, USA $ 80 000 September 2017 M

M Wh 10000 60 000 40 000 5000 20 000 - 0 2010 2015 2020 2025 2010 2015 2020 2025 Christophe PILLOT + 33 1 47 78 46 00 12-48 volts SLI HEV PHEV 12-48 volts SLI HEV PHEV [email protected] EV EV & PHEV China E-bus China EV EV & PHEV China E-bus China 20 X-EV BATTERY MARKET 2000 – 2025 IN M$ Cell Level Pack Level CAGR 2016-2025: +12% CAGR 2015-2025: +11% The Rechargeable Battery 30000 40000 Market and Main Trends 35000 2016 – 2026 25000 30000

20000 25000

15000 20000

$ $

M M M 15000 Novi, Michigan, USA 10000 September 2017 10000 5000 5000

0 0 2010 2015 2020 2025 2010 2015 2020 2025 12-48 volts SLI HEV PHEV 12-48 volts SLI HEV PHEV Christophe PILLOT EV EV & PHEV China E-bus China EV EV & PHEV China E-bus China + 33 1 47 78 46 00 [email protected] 21 THE WORLDWIDE BATTERY MARKET 1990-2016 Lead Acid Batteries 2016 In volume (MWh) +367 GWh for > US $ 33,4 Billion

SLI 500 000 79% The Rechargeable Battery Industry, ESS Market and Main Trends Others (Flow 450 000 2016 – 2026 E-bikes battery, NAS, …) 400 000 Others 16% Li-ion 350 000 medical, marine, others… % In volume 300 000 NiMH 250 000

GWh Industrial Batteries – Lead acid batteries Novi, Michigan, USA 200 000 58 GWh for US $ 10,4 Billion September 2017 NiCD 150 000 Telecom Lead Acid 100 000 22% 50 000 26% 8% UPS Other 0 44% Stationary, ESS

Christophe PILLOT 2000 2005 2010 2015 2016 Motive + 33 1 47 78 46 00 % In volume Source: AVICENNE ENERGY, 2017 [email protected] 22

THE WORLDWIDE BATTERY MARKET IN 2016: US $ 69 BILLION

80 000 14 000 EV, E-Bus

Portable 70 000 12 000 The Rechargeable Battery Market and Main Trends SLI 60 000 2016 – 2026 10 000 Others Others ESS 50 000 US $ 23 ESS UPS Billion for 8 000 UPS 40 000 “other” Telecom applications 6 000 Other Motive Telecom 30 000 Forklift Novi, Michigan, USA Other Motive September 2017 4 000 Power Tools 20 000 Forklift E-Bikes 2 000 Power Tools 10 000 E-Bikes 0 0 Lead Acid LIB Others Christophe PILLOT 1- Pack level: Pack including cells, cells assembly, BMS, connectors – Power + 33 1 47 78 46 00 electronics (DC DC converters, invertors…) not included [email protected] Source: AVICENNE ENERGY, 2017 23 TOTAL POTENTIAL MARKET (M$, PACK LEVEL1) Application details US$ 22,8 Billion in 2016 (1)

E-Bikes The Rechargeable Battery Others Power Tools Market and Main Trends 13% 24% 8% 2016 – 2026

Forklift ESS 13% 15%

UPS Telecom 12% Novi, Michigan, USA 14% Other Motive September 2017 1% Source: AVICENNE ENERGY 2016 1 2 3 4 5 6 7 8 9 10 11

Christophe PILLOT + 33 1 47 78 46 00 1- Pack level: Pack including cells, cells assembly, BMS, connectors – Power electronics (DC DC converters, invertors…) not included [email protected] 2- Other App: Military, aerospace, Oil & Gas, Railways, Aviation, Utility metering,… 24 ESS SEGMENTATION Services provided by Energy Storage System (ESS)

On grid services

• Reconcile momentary differences The Rechargeable Battery caused by fluctuations in generation and/ or loads • Provide an active reserve of power Market and Main Trends and energy to (re)start power 2016 – 2026 Regulation – Frequency regulation Black start – Voltage support generator – Load following/ ramping support – Power quality

• Enable deferral of utility investments • Store energy when the price of by using relatively small amounts of Investment storage Arbitrage electricity is low and releases it on the grid when prices are high deferral – Congestion relief Novi, Michigan, USA – Avoid infrastructure investment September 2017 • Provide emergency power when • Provide electricity power supply in utility power is not available Grid an area not connected to the grid Back-up – UPS (Uninterruptible power e.g. supply) independent and – Rural community – Power continuity power – Based stations powered by Solar reserves – Reserves to face lose of one supply energy generator Christophe PILLOT Off grid services + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY 2016 25 ESS SEGMENTATION

The Rechargeable Battery Market and Main Trends 2016 – 2026

Novi, Michigan, USA September 2017

Christophe PILLOT + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY 2016 26 ESS REQUIREMENTS On structuring parameters: discharge time and average power, segments highlight different patterns

The Rechargeable Battery Market and Main Trends 2016 – 2026

Novi, Michigan, USA September 2017

Christophe PILLOT + 33 1 47 78 46 00 [email protected] Source : AVICENNE Energy, 2016 27 ENERGY STORAGE SOLUTIONS Mapped on discharge time and power, technologies will appear suitable for certain segments only

The Rechargeable Battery Market and Main Trends 2016 – 2026

Novi, Michigan, USA September 2017

Christophe PILLOT + 33 1 47 78 46 00 [email protected] Source: AVICENNE Energy, 2016 28 ESS MARKET & FORECASTS From 36 GWh to 65 GWh in 2025 ESS (1) excl Telecom & UPS CAGR: +6% CAGR: +13 to 15%

70000 25000 Others Li-ion 48% 52% The Rechargeable Battery 60000 Market and Main Trends 20000 2016 – 2026 50000

40000 15000 Li-ion 28% MWH 30000 MWH 10000 Others 72% Novi, Michigan, USA 20000 September 2017 5000 10000

0 0 2015 2025 2015 2025 2025 Opt(1) Generation and T&D segments (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12) UPS (18) Generation and T&D segments (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12) Power continuity, Telecom (17) Christophe PILLOT ESS End Users (13, 14, 15, 16, 19, 20) + 33 1 47 78 46 00 ESS End Users (13, 14, 15, 16, 19, 20) [email protected] (1) If LIB cost is < 150$/kWh, the market could be much more Source: AVICENNE Energy, 2016 important 29

LI-ION BATTERY MARKET FORECASTS From 90 GWh in 2016 to 300 GWh CAGR 2016/2025 +15 % per year in Volume Li-ion Battery sales, MWh, Worldwide, 2000-2015 350 000 2016: 90 GWh The Rechargeable Battery Auto, E-bus Auto, E-bus Market and Main Trends Excl. China China 300 000 13% 2016 – 2026 CAGR 15/25 30% (Realistic) 250 000 Others 16% Electronic Industrial, ESS 200 000 devices 6% Others M Wh 40% Industrial, ESS 22% 11% 150 000 Novi, Michigan, USA 2025: 300 GWh September 2017 100 000 Auto, E-bus China 22% Auto, E-bus Auto, E-bus China 50 000 Auto, e-bus Excl. 17% Excl. China 43% China 21%

- Electronic devices 6% Industrial, ESS Electronic 7% 2000 2005 2010 2015 2020 2025 devices Others Christophe PILLOT 18% 11% + 33 1 47 78 46 00 Others: medical devices, power tools, gardening tools, e-bikes… [email protected] Source: AVICENNE Energy 2016 30 TAKEAWAYS Battery Market 2015-2025 RECHARGEABLE BATTERY MARKET CAGR = +6% / Li-ion>+10% WORLDWIDE 2000-2025 847GWh Li-ion battery is driven today by Automotive & Industrial applications 628 GWh Others

In 2012, most of the car makers (except Toyota) switch to Li- ion for HEV 432 GWh LIB 325 GWh

The Rechargeable Battery MWh P-HEV, EV and E-buses will be powered by Li-ion: 210 GWh NiMH Market and Main Trends 15 B$ market in 2016 - 28 B$ in 2020 & 38 B$ in 2025 with NiCd 2016 – 2026 high numbers in China (2016: US$ 3,6 Billion for xEV and US$ 4,8 Billion for xE-Buses) Lead Acid EV expectations attract large Chemical companies 2005 2010 2015 2020 2025 New materials are needed to meet Automotive standards > 115 B$ 2,8 HEV will account for less than 3% of the auto sales in 2020 (Pack level) 94 B$ 17 P-HEV & EV < 2% by 2020

Micro-hybrid will achieve >50% in 2020/25 63 B$ 38 Novi, Michigan, USA Lead acid battery will be the first market in 2025 in volume, 43B$ 10 September 2017 30B$ but Li-ion market will be higher than Lead acid from 2020. 25B$ A very small EV market in the automotive world will represent 49 a huge market for batteries New LIB applications: UPS, Telecom, Forklift, Medical, 2000 2005 2010 2015 2020 2025 Residential ESS, Grid ESS: CAGR > 10% in the next 15 years Lead Acid (+4%) NiCd (-6%) NiMH (-7%) LIB for 3C (+0%) Lithium battery for other application (ESS, stationary, LIB for xEV (+13%) LIB for Others* (+12%) industrial…) will reach 10 Billion $ market at the pack level in Christophe PILLOT the next 5 years (CAGR 2016-2025) + 33 1 47 78 46 00 ESS market could be much more important if the price of LIB Others: Automatic handling equipment, forklifts, back-up, UPS, [email protected] at the system level is under 150 $/kWh Telecom, medical devices, Residential ESS, Grid ESS, … 31 THANK YOU

Mike SANDERS

The Rechargeable Battery Senior Advisor Market and Main Trends 2016 – 2026 Avicenne Energy US

Email: [email protected]

Mobile: 302-540-9457

Novi, Michigan, USA September 2017

Christophe PILLOT + 33 1 47 78 46 00 [email protected] 32 1- E-BIKES 1 LIB: FROM US$ 1,9 BILLION IN 2016 TO 6,5 IN 2025 - CAGR16-25: +15%

Market 2016-2025 (US $, Million) – CAGR: 10% Main drivers Main Limiters E-bike in China: Banning of gasoline In Japan, US and Europe, E-bikes are 8000 1 ASP : powered motorcycles in china boost already equipped by Li-ion 2016: 480 $/Kwh 6000 2025: 330 $/kWh e-bikes: “Necessary” In China the only parameter to In US, Europe and Japan, “Green choose a battery is the cost The Rechargeable Battery 4000 LIB image”, sport, leisure, transportation: Chinese E-bike ASP: 320 $/kWh: very Market and Main Trends Lead Acid 2000 “Environment & Health” difficult to penetrate this market 2016 – 2026 ASP : LIB penetration in China from 6 to 0 2016: 77 $/kWh 14% 2025: 70 $/kWh 2010 2015 2020 2025

LIB 2016 by Area LIB 2025 by Area Competitors US US Customers 4% 2% + > 500 e-bike 11% 6% 8% BMZ (Germany) Bosch, Europe Europe 16% AXEON2 (UK) Panasonic mfg.

China China HITECH (Taiwan) Bion-X Novi, Michigan, USA 67% 86% TranX-Z September 2017 Others Others Phylion (China)

LIB Penetration (% device) LIB market (M$) Battery needs LIB needs 100% 10000 Performances characteristic Most valuable improvements 1- Price decrease 50% 5000 1- Cycle life 2-Energy density 2- Cycle life 3- Fast charge 3- Low cost 0% 0 Form factor: from cylindrical to 2010 2015 2020 2025 2010 2015 2020 2025 Average Capacity:300 Wh Laminate Christophe PILLOT No standardization China US, EU, Jap CHINA Others + 33 1 47 78 46 00 [email protected] Note: 1- Pack level – 2- A Johnson Matthey affiliate Source: AVICENNE ENERGY Analyses 33

2- POWER TOOLS LIB: FROM US$ 1,4 BILLION IN 2016 TO 2,2 B IN 20251 – CAGR:+6%

Market 2015-2025 (US $, Million) – CAGR:+4% LIB Main drivers LIB main Limiters 3000 Higher voltage LIB average sales price 1 ASP NiCd substitution Reliability 2000 2012:560 $/Kwh 2020: 390 $/Kwh NiCd regulation High rate discharge The Rechargeable Battery 1000 Li-ion Cordless power tools & gardening Fast charge Market and Main Trends tools market increase (+4% per year) Life time 0 NICd Higher energy density, less weight 2016 – 2026 ASP:

2012: 335 $/kWh 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2020: 275 $/kWh

Competitors Battery 2013 by Area LIB 2020 by Area Customers >75% of the power tools are Power tools will be made in Cell/Pack Mfg.: TOP3: Samsung, Bosch Makita made in China China Panasonic, Sony (> 75%) B&D Jingding Local demand in Europe, US, next Pack makers: AXEON (Bosch), But, battery pack could be made Hilti Novi, Michigan, USA on the end-user area (Ex: Bosch – to the end user to increase TTI … September 2017 Axeon Poland) flexibility & Just in Time mfg.

LIB Penetration LIB market (M$) Battery needs LIB needs 80% 3 000 Important characteristic: Most valuable improvements 60% 2 000 1- Higher power & capacity 1- Price decrease 40% 1 000 2-Fast recharge 2- Fast charge 20% 2012 ASP NiCd: 350 $/kWh 3- High rate discharge 0% - 2012 ASP LIB: 550 $/kWh Form factor: Cylindrical Christophe PILLOT 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Average Capacity: 60 Wh No standardization + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY Analyses Note : : 1- Pack level 34

3- MOTIVE INDUSTRIAL: FORKLIFTS2 1 LIB: FROM US$ 0,56 BILLION IN 2016 TO 2,4 IN 2025 - CAGR16-25: 18%

Market 2016-2020 (US $, Million) – CAGR:7% Main drivers Main Limiters

8000 ASP Where economies are healthy, they Low penetration of E-forklift in 2016: 500 $/kWh reflect strong motive power Asia 6000 2025: 300 $/kWh production High LIB capital price (x 5 compare LIB Europe & US got high E-forklift ratio to lead acid) The Rechargeable Battery 4000 compare to Asia Safety concerns Market and Main Trends in two of the lift truck types, sit- 2000 Lead Acid LIB higher life time (* 3 to 5) 2016 – 2026 down rider and high reach, the ASP Multiple shift operation where counterbalance for the lift truck is 0 2016:120 $/kWh battery change is required (time 2025: 100 $/kWh supplied mainly by a lead acid 2010 2015 2020 2025 consuming) battery

Battery 2016 by Area LIB 2025 by Area Competitors Customers Europe – largest producer of Lead Acid & LIB: Enersys (35%), motive power batteries – has 18% For lead acid, After market Exide (10%), East Penn (10%), higher percentage of electric vs. represent 60% of the market: lot 32% US Hoppecke (10%), Crown (10%) gas trucks (75%) than in N. America 16% of different customers (industrials) LIB systems: BMZ, Lithium Novi, Michigan, USA (64%) – China: High % of Europe For LIB, OEM Forklift: TOYOTA, September 2017 Gas/propane trucks (> 80%) 34% Balance, … Kion , Jungheinrich, NACCO , Crown, Mitsubishi Caterpillar LIB Penetration LIB market (M$) Battery needs LIB needs 20% 3 000 important characteristic Most valuable improvements 1- Price 2 000 1-high charge/discharge rates 10% and capacity 2- Convince customers on “total 1 000 2-high life time, range, cost of ownership” Form factor: large format 0% - Christophe PILLOT 2010 2015 2020 2025 2010 2015 2020 2025 prismatic – size + 33 1 47 78 46 00 Average Capacity: 22 kWh standardization [email protected] Source: AVICENNE ENERGY Analyses Note: : 1- Pack level 2- Including all kind of Material handling equipment 35

4- STATIONARY: TELECOM MARKET 1 LIB: FROM US$ 0,4 BILLION IN 2016 TO 1,2 IN 2025 – CAGR16-25: 13% Market 2016-2025 (US $, Million) – CAGR: +2% Main drivers main Limiters

4 000 ASP LIB developed for new equipment Lead Acid Vs. Li-ion… 2016: 490 $/kWh Increased Bandwidth requirements Lead Acid capital cost 5 times 3 000 2025: 310 $/kWh Wireless Market driving growth cheaper LIB The Rechargeable Battery 2 000 Strong Network Growth in China, Total cost of ownership could India, E. Europe & S. America Market and Main Trends Lead Acid be compare with Lead acid 1 000 2G-> 3G -> 4G … need new 2016 – 2026 equipment's - ASP 2016: 180 $/kWh LIB: Specially in Hot climate 2010 2015 2020 2025 2025: 155 $/kWh

Battery 2016 by Area Battery 2020 by Area Competitors China Customers 5% Lead Acid & LIB: Enersys (35%), 8% 14% China Europe 20% 16% Exide (10%), and local Not so many customers; big 16% Europe US suppliers in each countries India telecom carriers in each 14% 28% US LIB systems: “large companies” Novi, Michigan, USA 19% 21% Others countries India : SAFT, others? September 2017 20% Others 19% Japan

LIB Penetration LIB market (M$) Battery needs LIB needs

20% 1 500 Most important performances Most valuable improvements characteristic 1- Capital costs 1 000 2- Safety Proof 10% 1- Hot T°C performances 500 2- Customized for the new Equipment 3- Reliability network Customized battery developed for 0% - new equipment Christophe PILLOT 2010 2015 2020 2025 2010 2015 2020 2025 Average Capacity: 5-10 kWh modules (100 Ah) + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY Analyses Note: : 1- Pack level 36 5- STATIONARY: UPS MARKET 1 LIB: FROM US$ 0,27 BILLION IN 2016 TO 0,9 IN 2025 – CAGR16-25: : 14% Market 2016-2025(US $, Million) – CAGR: +3% Main drivers main Limiters

4000 ASP UPS Drivers: Safety could be an 2016:490 $/kWh New Data Storage Centers important issue here 3000 2025: 300 $/kWh Mobile Society LIB LIB drivers: The Rechargeable Battery 2000 Less volume, less place Market and Main Trends Lead Acid > Life time 1000 2016 – 2026 LIB is more needed where data are ASP sensitive 0 2016: 185 $/kWh 2025: 155 $/kWh Li-ion battery could also help to 2010 2015 2020 2025 save electricity during peak time

Battery 2016 by Area Battery 2020 by Area Competitors Customers China 8% 5% Lead Acid & LIB: Enersys (35%), Few leaders/many products: 14% China Europe 16% 16% Exide (10%), and local Emerson/Liebert, Schneider/APC, Europe 20% US suppliers in each countries Eaton Powerware, Gamatronic, US India 14% India 21% LIB systems: local companies Riello Novi, Michigan, USA 28% 19% Others Others providing > services September 2017 20% 19% Japan Japan LIB Penetration LIB market (M$) Battery needs LIB needs

15% 1 000 Most important performances Most valuable improvements characteristic 1- Convince on Safety 10% 500 1- Back-up at high current 2- Capital Cost 5% 2- weight, volume 3- Reliability 0% - 3- life time Form factor: Cylindrical Christophe PILLOT 2010 2015 2020 2025 2010 2015 2020 2025 Average Capacity: 3-5 kWh modules New development for new + 33 1 47 78 46 00 equipment Note: UPS: Uninterruptible Power Supply [email protected] Source: AVICENNE ENERGY Analyses APC: American Power Conversion 37

LEAD ACID BATTERY SUPPLIERS 2016 Lead Acid battery Market Lead Acid battery Market share : JCI is leading the SLI share : Enersys is leading the market (B$ 20,7) Industrial market (B$ 11,7) EXIDE The Rechargeable Battery EASTPENN C&D YUASA 11% 6% 8% Market and Main Trends 9% JCI FIAMM 2016 – 2026 EXIDE 36% 4% 10% YUASA 11% JCI ENERSYS EASTPENN 19% OTHERS 7% 4% 29% Novi, Michigan, USA September 2017 Camel OTHERS FIAMM FENGFAN 3% 37% 3% 3%

Over the past 15th years, the global lead-acid battery industry has experienced significant consolidation and currently the main international players are EnerSys, Exide Technologies, Christophe PILLOT Johnson Controls, Inc., and GS Yuasa Corporation (“GS Yuasa”). + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY, 2017 38

THE LEAD ACID BATTERY MARKET BY APPLICATION AND TECHNOLOGY IN 2016

Lead acid battery market in 2016: Lead acid battery market in 2016: 367 GWH 367 GWH 4% 1% 7% 16% 9%

79% 84% SLI Stationary Motive E-bikes Others Flooded VRLA

The rechargeable battery Lead acid battery market in 2016: Lead acid battery market in 2016: market 2016-2025 US $ 33 Billions US $ 33 Billions SEPTEMBER 2017 4% 10% 3% 25%

26th Edition 22% 61% 75%

SLI Stationary Motive E-bikes Others Flooded VRLA Christophe PILLOT + 33 1 47 78 46 00 Source: AVICENNE ENERGY, 2017 [email protected] 39

LEAD ACID MARKET FORECASTS BY APPLICATION Lead acid battery demand (2010- Rationales 2025) – MWh – CAGR16-25: +4% 60 000 500 000 The Rechargeable Battery SLI: CAGR2016-25: +5% thanks to Market and Main Trends After market (80% of the market) 2016 – 2026 50 000 400 000 Micro-hybrid growth +3% In development countries

40 000 Motive (85% Forklift): CAGR2016-25: +5% 300 000 +5% Forklift market increase is small (+2%) 30 000 But more and more electrical forklift (80% in Europe, 65% in the US and 35% in Asia) 200 000 Novi, Michigan, USA In development countries 20 000 -5% September 2017 UPS & Telecom: CAGR2016-25: +3% 100 000 10 000 “Big data” +5% Mobile communications - - Energy Storage systems growth E-bike 100% of the market in China – Lead acid replaced E-Bikes Motive Christophe PILLOT by Li-ion (15% LIB e-bike sold in 2016 to 60% in Stationary (UPS, Telecom, ESS) Others + 33 1 47 78 46 00 2025) [email protected] Source: AVICENNE ENERGY, 2017 40

LEAD ACID MARKET FORECASTS BY TECHNOLOGY Lead acid battery demand (2010- Rationales 2025) – MWh – CAGR16-25: +4% Motive Battery technology 350 000 The Rechargeable Battery 140000 100% Market and Main Trends 300 000 50% Flooded 2016 – 2026 120000 AGM 250 000 0% 100000 +9% 2010 2015 2020 2025

200 000 Stationary Battery technology

80000 100% 60000 150 000 50% Flooded Novi, Michigan, USA September 2017 40000 100 000 AGM +21% 0% 2010 2015 2020 2025 20000 50 000 +4% E-bikes: almost 100% AGM batteries 0 - Motorcycles: almost 100% GEL batteries

Christophe PILLOT EFB AGM Flooded batteries GEL + 33 1 47 78 46 00 [email protected] Source: AVICENNE ENERGY, 2017 41